Legal & General dump firms who aren't doing enough for climate change

An interesting move by Legal & General, the UK’s largest fund manager, is reported in today’s Times.

L&G has sold holdings in businesses which it considers aren’t doing enough to meet climate targets. Firms dumped include oil firms, US food groups, Chinese banks (cited for funding coal fired generators outside China) and the Japanese car maker Subaru.

This is not mere greenwashing; L&G is in the business of making money for its customers. It will know that firms which embrace clean energy will have a competitive advantage over those which don’t. This will lead to bigger profits and better returns for investors.

This will set a trend and we should expect other fund managers to follow.